Thousands of small businesses have been left behind by energy suppliers’ failures to administer support
The Energy Bill Relief Scheme (EBRS) should have provided support to millions of businesses across the UK by automatically applying a discount to energy bills.
Most non-domestic suppliers worked hard to roll out this support on extremely short timescales. As a result, millions of businesses benefited from the EBRS, with the support being directly linked to many companies’ survival.
However, our case data suggests that many small businesses have struggled through the winter, because they haven’t received their EBRS.
This shocking article from Hannah Prevett in The Times confirmed our fears — finding that four of the five biggest energy suppliers had not passed on the discount to thousands of their customers.
One supplier has confirmed that up to 0.6% of their non-domestic customer base is affected. If that percentage is applied to all four of the suppliers mentioned in the Times article, then that leaves over 317,000 small businesses without support.
This omission is indicative of wildly varying standards in customer experience that we see across the non-domestic sector.
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Small businesses deserve better. Before support is reduced in April, Ofgem, Government and energy suppliers have an opportunity to make things right. Failure to do so could directly lead to hundreds of businesses falling into — entirely avoidable — financial hardship.
Consequences of absent support:
Failure to apply the EBRS through the winter has been blamed on administration issues. The length of time taken to rectify these problems will have knock-on effects:
- Some suppliers have confirmed that they have put the affected accounts on hold while they work out how to apply the discount properly
This is concerning because businesses will eventually have to face a large catch up bill covering the six months in which they were not paying for energy. Even if the catch up bill is not demanded up-front, spreading the cost of such a long period of energy use could lead to inflated bills for months into the future.
- We’re concerned that non-domestic energy suppliers are already not doing enough to help their customers with debt, meaning that the lack of bill support is hitting harder
The number of small business customers who have contacted Citizens Advice this year due to debt has doubled. Looking into this data, we can see that concerning debt and disconnection practices are on the rise, making it harder for businesses to recover from debt and get back in the clear.
Customers who haven’t received Government support, or who are facing inflated catch up bills need to be carefully supported to manage the debt that they are in. Energy suppliers need to provide assurance that customers impacted by failures to provide the EBRS will be provided with opportunities to negotiate affordable repayment plans for any debt they might be in.
Looking ahead: The Energy Bills Discount Scheme
The Energy Bills Discount Scheme (EBDS) will replace the EBRS from the 1st April, leading to a steep reduction in support for the majority of businesses. For customers on higher fixed, deemed or variable contracts, shifting to the EBDS will see an immediate hike in their energy bills.
For those who haven’t been receiving bill support for the last six months, this dramatic increase will be particularly devastating. To protect affected businesses from unnecessary hardship, Citizens Advice would like to see the following:
- Government and energy suppliers should consider what learnings can be obtained from the administration of the EBRS to reduce risk when the EBDS is rolled out.
- Ofgem should proactively engage with the largest non-domestic energy suppliers to ensure that they are ready to fully implement the Energy Bills Discount Scheme on the day that it is due to launch.
- Ofgem should seriously consider launching investigations into the suppliers identified as having failed to roll out the EBRS over the winter, to understand whether customers have been treated fairly. If necessary, compliance and enforcement action should be considered.
